When you open you first bar thinking that you will make a lot of money. Think that opening a bar will give you freedom and more time with your family. Or maybe because you are the boss you wouldn't have to answer to anyone else. If this are the reason for opening a business, you'd better think again.
On the other hand, if you start your business with the full picture, you'll have a better chance at entrepreneurial success:
• You are physically and mentally fit and possess the endurance and stamina to withstand potential challenges. Often call in business the unknown, less-than-vigorous health has been cause for more than a few bankruptcies.
• You succeed on independence, and you are skilled at taking control and adapt quickly to change when out the box or intelligent solution is needed. This is especially important when under strict time constraints.
• You get along with and can manage all different types of individuals and personalities
2. Poor Management
The number one reason for failure of new business owners frequently lack relevant business and management expertise in the following areas finance, purchasing, selling, production, hiring and managing employees. Unless business owner recognize what are they weaknesses, and assemble a team of experts to assist them, business owners may soon face disaster. They must also be educated and diligent to fraud, and put into place controls to avoid it.
Majority of bar owners get too involve and distracted with the operation of the business and overlook of the continuing study of market research and customer data, an area which may be more prone to disregard once a business has been established.
A successful manager is also a good leader who provide his team with clear directions and communicates effectively. Also has a skill at hiring competent people, training them and is able to delegate.
3. Insufficient Capital
A common fatal mistake for many failed businesses is having inadequate operating funds or reserve. Business owners underestimate how much money is needed to keep the doors open if the sales are slow during the first year of operation and they are forced to close before they even have had a fair chance to succeed. Another reason for failure is they have an unrealistic or over optimistic expectation of incoming revenues from sales.
4. Location
Location is critical to the success of your bar. Generally bad location always spell disaster to even the best-corporate enterprise.
Some elements to consider when selecting a location
• Who are your customers
• Foot traffic, accessibility, parking and lighting
• Proximity of competitors
• Condition and infrastructure of building
• Tenant improvements
• The history of the neighborhood
5. Lack or Poor Planning
Most successful bars spend the majority of their time on careful, methodical, strategic planning -- and the hard work –Many small businesses fail because of lack and poor business planning.
It is fundamental for all businesses to have a business plan or at least road map.
High level ingredients of a business plan may include:
• Description of the business, vision, goals, and keys to success
• Number of employees need it to operate the business effectively and cost of labor
• Risk planning (potential problems and solutions)
• Financial: capital equipment and supply list, balance sheet, income statement and cash flow analysis, sales and expense forecast
• Analysis of competition
• Marketing, advertising and promotional activities
• Budgeting and managing company growth